The Court of Appeal has overturned a controversial High Court ruling (summarised in our blog post here) concerning the enforcement of non-EU exclusive jurisdiction clauses which conflict with EU jurisdiction rules.
Petter v EMC Europe Ltd concerned a dispute with a UK-domiciled ex-employee regarding a share incentive scheme operated by the employer’s US parent company and subject to a Massachusetts exclusive jurisdiction clause.
EU jurisdiction rules provide that in “matters relating to individual contracts of employment” an employer can only bring proceedings against the employee in the country where the employee is domiciled. The Court of Appeal adopted a broad interpretation of “matters relating to individual contracts of employment” and “employer” to cover the dispute in this case. It then exercised its discretion to grant an anti-suit injunction restraining the US company from pursuing the proceedings it had begun in Massachusetts pursuant to the exclusive jurisdiction agreement.
The Court felt constrained to follow its decision in Samengo-Turner v Marsh & McLennan that a company which provides benefits to employees of associated companies within the same group may be regarded as an employer for the purposes of the EU jurisdiction rules if it provides those benefits in order to reward and encourage those employees for the benefit of their immediate employer and the group as a whole. Further, in cases where the EU jurisdiction rules apply, an anti-suit injunction should ordinarily be granted to restrain an employer from bringing proceedings outside the Member States in order to protect the employee’s rights.
Employers should bear in mind that they are unlikely to be able to rely on exclusive jurisdiction clauses, whether in favour of an EU or non-EU court.